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Stop horsing around. What is in our funds?!

The horse meat scandal has had some parallels in the investment world. You don't always know what is in your fund.


by Gavin Lumsden on Feb 22, 2013 at 10:49

Stop horsing around. What is in our funds?!

The horse meat scandal sweeping the foods industry has had the amazing effect of making financial services look clean.

As things stand the outgoing regulator, the Financial Services Authority, looks like a paragon of efficiency compared to the other FSA, the Food Standards Agency. No one would have expected that in the wake of the banking crisis five years ago!

Actually the investment funds sector has a pretty good reputation. Compared to other financial sectors, most notably banks, fund management is clean, notwithstanding the frequent criticism of charges and performance.

But when things occasionally go wrong with investment funds the results can be spectacular. The fact is you can't always be sure what goes in your fund.

Next: Neigh lad

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3 comments so far. Why not have your say?

Julian Maples

Feb 22, 2013 at 15:54

I am not sure why the writer thinks that the "rules" will protect when they did not protect from Madoff. Please could he explain? Also the increasing use of funds by fund managers who have in fact sub-contracted the whole business to others means that it is becoming less and less possible to know what is in one's funds. please would the writer comment.

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Anonymous 1 needed this 'off the record'

Feb 22, 2013 at 15:59

Hi Gavin - It's all very well to write that we should stay well informed but that is not always easy. Most providers give nothing more than they have to. I would like to know some very basic information regarding a fund run by the Prudential and they simply will not provide it. Evaluating performance is impossible because the information they do provide is mainly made up of percentages of numbers they will not give. The Fact Sheets you mention are often similarly made up. Meanwhile, in my case, the Prudential's With-Profits Committee and the FSA stand idly by.I'm afraid that until funds are required to produce detailed audited accounts we are destined to remain pretty much in the dark.

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Keith Cobby

Feb 22, 2013 at 17:09

I recently posted that I had looked through the iShares annual report and found it impenetrable, with its structure and sub-funds. The same is true for OEICs.

I prefer investment trusts/companies and unit trusts because they are separate legal entities and their reports are much more comprehensible and informative.

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